SEC News Digest, October 1, 2001 · What Glasser Legal Works/Chicago-Kent Financial Services Convergence Where New York Marriott Eastside New York Contact Steve Seemer 973 890-0008

SEC NEWS DIGEST

tssue 2001-189 October 2001

COMMISSION ANNOUNCEMENTS

PUBLIC APPEARANCES OF SENIOR COMMiSSION OFFICIALS OCTOBER 2001

The following is schedule for October 2001 of the public appearances of SEC officials

including the Chairman Commissioners and senior staff members For additional

information on events hosted by groups other than the Commission please call the

contact numbers listed As events are subject to change please confirm them with the

SECs Office of Public Affairs or the sponsoring organizations

When Thursday and Friday October 11-12 2001

Who Paul Roye Director Division of Investment Management

What LI-ABA Investment Management Regulation

Where Westin Fairfax Washington DC

Contact Thomas Hennessey 215 243-1638

When Friday October 12 2001

Who David Becker Director Office of General Counsel

What Regulation FD

Where The Hyatt Regency Greenwich Hotel Greenwich Connecticut

Contact The American Corporate Counsel 203 461-9004


Who David Martin Director Division of Corporation Finance

What Westchester/Southern Connecticut Chapter of the American

Corporate Counsel Association

Where Hyatt Regency Greenwich Hotel Stamford CT

Contact Richard McGrath 203 351-4485Public

When Thursday October 18 2001


Annette Nazareth Director Division of Market Regulation

What Glasser Legal Works/Chicago-Kent

Financial Services Convergence

Where New York Marriott Eastside New York

Contact Steve Seemer 973 890-0008 x106

When Monday October 22 2001


What MFA MAR/I-ledge Conference

Panelist

Where Bermuda

Contact John Game 202 67-1 140

When Monday October 22 2001

Who Chairman Harvey Pitt

What AICPA Governing Council Meeting

Where Loews Miami Beach Hotel Miami FL

Contact Geoffrey Pickard 212 596-6299 or

Linda Dunbar 212 596-6236

When Thursday and Friday October 25-26200

Who Paul Roye Director Division ofT stment Management

What ALl-ABA Life Insurance Products Conference

Where Loews LEnfant Plaza Hotel Washington DCContact Stephen Roth 202 383-0100


Who David Martin Director Division of Corporation Finance

What Institute of Continuing Legal Education

Where Swissotel Atlanta Atlanta Georgia

Contact Larry Jones Executive Director 706 369-5664


Who Commissioner Isaac Hunt

What Federation of Schools of Accountancy

Where Crystal Gateway Marriott Hotel NewYork

Contact Cecilia Lo Chin 212 596-6165

SEC PROVIDES NEW RELIEF REGARDING ISSUER REPURCHASES

On September 28 2001 in order to facilitate the continued orderly operation of the

markets the Commission announced that it used its general exemptive authority under

Section 36 of the Securities Exchange Ac of 1934 to temporarily modify certain

conditions of Rule lOb-18 for issuers that repurchase their own common stock Fridays

exemptive relief which is described below is not an extension of the emergency orders

issued on September 14 and 21 The relief provided in those orders expired on

September 28 2001 Fridays relief extends from October through October 12 It is

the Commissions current expectation that further relief following October 12 2001 will

not be necessary

The Exemptive Order temporarily eases certain conditions of Rule lOb-18 for issuers

repurchasing their own common stock First issuers whose common stock trades at

sufficiently high levels meeting an average daily trading volume and public float test

may effect purchases up to ten minutes before the scheduled close of trading on the

primary market for such security An issuers purchase may not constitute the opening

transaction Second the volume condition for issuer repurchases has been eased to allow

purchases of 100 percent of trading volume

The Exemptive Order also provides that public companies that repurchase their shares

during the period ending October 12 2001 will not have adverse accounting

consequences under the pooling of interests provisions After the expiration of the

Exemptive Order acquisitions by companies of their own equity securities once again

will be governed by the existing accounting literature and related Commission rules and

staff interpretations related to pooling-of-interests accounting in the same manner as they

were before the Commission issued its Emergency Order on September 14 2001 Rel

34-44874 Press Re 200 1-106

SEC ANNOUNCES ASSISTANCE TO THE AIRLINE AND iNSURANCE INDUSTRIES

IN REACHING THE CAPITAL MARKETS

The President and Congress have made clear their desire to foster the continued vitality

of the nations airline and insurance industries In support of these efforts and to help

companies in these industries reach U.S capital market expeditiously we have taken the

following administrative steps for airline and insurance companies covered by

Congressional legislation in the wake of the September 11 terrorist attacks

We have established separate telephone and e-mail hotlines for the airline and insurance

industries their underwriters and other advisors These hotlines will allow companies in

these industries to obtain .immediate responses to financing and disclosure questions The

following are the new telephone number and e-mail address

Telephone calls should be directed to 202 942-2816

E-mail should be directed to cffiotlinesec.gov

We wish to help companies in these industries use our short-form registration on Form S-3 to

raise capital quickly We have directed the Division of Corporation Finance to take the

following short-term actions to enhance the usefulness of Form S-3 for companies in these

industries

For companies with existing shelf registrat is pursuant Rule 415a1x the staff will

permit the extended use of our brief notice registrationof additional securities under

Rule 462b Under this extension the staff will permit use of those procedures

including notice by fax and immediate effectiveness to register additional securities in

an amount up to 20% of the dollar amount of securities originally registered on that shelf

registration statement rather than the amount remaining on that registration statement

We have directed the Division to permit use of Form S-3 for primary offerings by

companies even if they have been late with required Exchange Act report during the

last year as long as the companies meet all other reporting requirements for Form S-3

registration of primary offerings

requirement to use Form S-3 is that the companys public float be at least $75 million

number of companies that met this test on September 10 2001 may no longer Webelieve that issuers in the airline and insurance industries that were eligible to use Form

S-3 on September 10 should be eligible to use it for the remainder of the year

Accordingly those issuers may calculate tla public float for purposes of Form S-3 on

any date between July 2001 and December 2001

We have directed the Division of Corporation Finance to process Securities Act filings by

reporting companies in the airline and insurance industries within not more than five business

days of their receipt

The Commission has instructed the Division of Corporation Finance to continue these

administrative steps through the end of 2001

Any company in these industries or shareholder that was or will be unable to meet deadline

including those applicable to shareholder proposals as result of the events of September

11 2001 should contact the Division of Corporation Finarre at the hotline phone number or

e-mail address If the deadline was or will be met within the ten business days of the original

due date the Division will consider the deadline to have been met in assessing the

timeliness of the required action

An internal task force will monitor federal programs regarding airline and insurance

companies and will prepare appropriate disclosure guidance for companies affected by these

federal programs after discussion with outside professionals and experts

The Commission solicits public views on any other relief it can give consistent with investor

interests and asks that comments be received on the hotline e-mail addresses or through the

U.S mail at Office of Chief Counsel Division of Corporation Finance U.S Securities and

Exchange Commission 450 Fifth Street NW Washington DC 20549 Press Rel 2001-

107

ENFORCEMENT PROCEEDINGS

ADMINISTRATIVE PROCEEDINGS INSTITUTED AGAINST AND

SIMULTANEOUSLY SETTLED WITH FORMER CEO

On September 27 2001 the Commission instituted settled administrative proceeding

against Paul Jurewicz resident of Liberty Illinois who was chief financial officer of

Sabratek Corporation while certain of its employees engaged in scheme to overstate the

Companys reported revenue Without imitting or denying the findings Jurewicz

consented to cease and desist from commnung or causing any violation and any future

violation offederal securities laws and to pay disgorgement and prejudgment interest

totaling $17907 In determining to accept the Offer of Settlement the Commission

considered remedial acts promptly undertaken by Jurewicz and the cooperation afforded

the Commission staff

The settled order contains the following findings From the first quarter of 1998 through

the first quarter of 1999 certain employees of Sabratek engaged in scheme to overstate

the Companys reported revenue by improperly including revenue from purported sales

of infusion pumps and billings from consulting services that were largely not performed

Over these five quarters Sabratek overstated net sales by 62% and operating income by

229% As Sabrateks chief financial officer from July 1998 to April 1999 Jurewicz

contributed to the misrepresentations by causing to prepared and reviewing financial

statements and by signing the Form 10-Q for the third quarter of 1998 Form 10-K for

1998 and the management representation letters to the auditor for these periods

Jurewicz was reckless in not knowing th Sabrateks financial results were materially

overstated Further Jurewicz did not devise or maintain system of internal accounting

controls to ensure that Sabrateks revenue from sales and billings was accurately

recorded Rel 34-44860 AAE Rel 1459 File No 3-10591

ADMINISTRATIVE AND CEASE AND DESIST PROCEEDINGS iNSTITUTED

FINDINGS MADE AND SANCTIONS IMPOSED AGAINST RAUSCHER PIERCE

REFSNES INC NOW KNOWN AS DAIN RAUSCHER INCORPORATED

On September 27 2001 the Commission issued an Order Instituting Public

Administrati\e and Cease And Desist Proceedings Pursuant to Section 8A of the

Securities Act of 1933 Securities Act and Sections 15b 19h and 21C of the

Securities Exchange Act of 1934 Exchange Act Making Findings and Imposing

Remedial Sanctions Order against Rauscher Pierce Kefsnes Inc now known as Dam

Rauscher Incorporated Rauscher The Commission simultaneously accepted an Offer

of Settlement in which Rauscher without admitting or denying the Commissions

findings consented to the entry of the Ordei which requires that it cease and desist from

committing or causing any violation and any future violation of Sections 17a2 and

of the Securities Act Section 15Bc1 of the Exchange Act and MSRB Rule G-17 In

addition the Order requires that Rauscher pay civil money penalty in the amount of

$200000 to the United States Treasury and that it maintain its policiesand procedures

relating to municipal securities underwriting that Rauscher revised prior to the date of

this Order

The Order alleges that Rauscher through its investment bankers violated the above

provisions in connection with the offer and sale to the public of municipal bonds issued by

the City of Miami Florida In particular Rauscher underwrote the municipal bond

offering in December 1995 for $72 million in non-ad valorem revenue bonds to pay for

certain of the City of Miamis annual pension and employee compensated absences

obligations In the Matter of Rauscher Pierce Refsnes Inc now known as Dam Rauscher

Incorporated Rels 33-8013 33-8014 34-44864 File No 3-10592 In the Matter of Royal

Bank of Canada Rels 33-8015 34-44865 File No 3-10592

ADMINISTRATIVE PROCEEDING INSTITUTED AGAINST MERRIMAC ADVISORSCOMPANY AND FREDRIC FRENCH

On September 27 2001 the Commission instituted public administrative and cease and

desist proceedings pursuant to Sections 203e 203f and 203k of the Investment

Advisers Act of 1940 Advisers Act and Section 9b of the Investment Company Act of

1940 against Fredric French French and Merrimac Advisors Company Merrimac of

Albuquerque New Mexico Merrimac is registered investment adviser founded in late

1996 and French is the principal of Merrimac In an Order Instituting Proceedings

Order the Division of Enforcement alleges that French and Merrimac misrepresented

Merrimacs performance history to clients and potential clients of Merrimac

The Division alleges that from 1997 through 1998 French and Merrimac provided

clients and potential clients false information claiming that Merrimac had five-year

performance history of generating annual returns over 20% and also overstating the

number of Merrimacs clients and amount of client funds under management As

result the Order alleges that Merrimac willfully violated Sections 204 2061 2062and 2064 of the Advisers Act and Rules 204-2a16 and 2064-la5 thereunder

that French willfully violated Sections 2061 and 2062 of the Advisers Act and that he

caused and willfully aided and abetted Merriinacs violations

hearing will be held before an administrative law judge to determine whether the

allegations in the Order are true and if so whether cease-and-desist orders civil penalties

or any other sanctions are appropriate against Merrimac and French Rels IA-1977 IC-

25 195 File No 3-10594

COMMISSION INSTITUTES SETTLED ADMINISTRATIVE PROCEEDING AGAINSTPERFORMANCE ANALYTICS INC AND ROBERT MOSESON

On September 27 2001 the Commission entered an Order Instituting Public

Administrative and Cease and Desist Proceedings Pursuant to Sections 203e and

of the Investment Advisers Act of 1940 Advisers Act Making Findings and Imposing

Remedial Sanctions and Cease-and-Desist Order Order against Performance Analytics

Inc Performance and one of its principals Robert Moseson Moseson Performance

and Moseson while neither admitting nor 1ying the Orders findings consented to the

entry of the Order and the imposition of sanctions against them

The Order finds that Performance presented inaccurate information about the

performance history of Merrimac Advisors Company Merrimac and Fredric French

French to Performance clients According to the Order from 1997 through early 1998

Performance presented Merrimac as potential money manager to Performance clients

who include pension funds andprofit sharing plans The Order finds that French the

principal of Merrimac had previously worked for Lakeview Securities Corp Lakeview

registered broker-dealer affiliated with Performance from 1993 until he founded

Merrimac in 1996 According to the Order during the time that French worked for

Lakeview he had reported to Moseson in connection with Lakeviews management of the

portfolio of Investors Research Fund Inc mutual fund for which Lakeview acted as

investment adviser The Order finds that after French formed Merrimac he made

presentations to Performance clients seeking to obtain money management clients for

Merrimac As part of these presentations Performance provided its clients with reports

that included inaccurate information overstating Merrimacs number of clients and years

in operation amount of client funds under management and the annual rates of return that

Merrimac had obtained for its clients The 3rder finds that Moseson should have known

that the Merrimac track record provided to Performance clients was inaccurate

Accordingly the Order finds that Performance and Moseson willfully violated Section

2062 of the Advisers Act

The Order requires Performance and Moseson to cease and desist from committing or

causing any current or future violations of Section 2062 of the Advisers Act censures

Performance and Moseson suspends Moseson from association with any investment

adviser for three months and orders Moseson to pay civil penalty in the amount of

$25000 Rel IA-1978 File No 3-10595

CEASE AND DESIST PROCEEDINGS INSTITUTED AND SIMULTANEOUSLYSETTLED AGAINST ENRICO CORTESANO IN CONNECTION WITH INTERNET

PRIME BANK SCHEME

The Commission announced that it has inituted and simultaneously settled cease and

desist proceedings pursuant to Section 8A of the Securities Act of 1933 Securities Act

against Enrico Cortesano resident of Hollywood Florida in connection with prime

bank scheme Cortesano offered over the Internet The Commission found that Cortesano

violated the securities registration and anti-fraud provisions of the federal securities laws

and ordered him to cease and desist from future violations of these provisions

Specifically the Commission found that from September 2000 through late March 2001

Cortesano offered for sale on his Internet website securities in the form of participation

interests in bank debenture trading programs that purportedly lasted for period of one

year and one week Cortesano who had not filed registration statement with the

Commission made materially false and misleading statements and omissions including

among other things that the securities existed that investors could earn returns ranging

from approximately 60% to 200% per month depending on the amount invested that the

returns were guaranteed to be paid on daily weekly or monthly basis and that there

were no risks associated with investing in the trading programs Cortesano took no

reasonable steps to verify whether the securities being offered existed or whether the

representations made on his website were true Additionally he used and published

materials without establishing or investigating their accuracy or veracity

Without admitting or denying the Commsions findings Cortesano consented to the

entry of an order requiring him to cease and desist from committing or causing future

violation of Sections 5c 17a1 and 17a3 of the Securities Act Rel 33-8017

File No 3-10597

ORDER INSTITUTING PUBLIC PROCEEDINGS MAKThG FINDINGS AND

IMPOSING CEASE AND DESIST ORDER AGAINST DAVID BELLET

The Commission announced that on September 28 2001 it instituted and settled

proceedings against David Bellet of New York New York Bellet consented without

admitting or denying the Commissions findings to an order making findings and imposing

cease-and-desist order preventing Bellet from causing violations of certain books and

records provisions of the Investment Advisers Act of 1940 Advisers Act specifically

Section 204 of the Advisers Act and Rule 204-2a12 thereunder

The Commission found that Bellet while part owner and advisory representative of

Crown Capital Management Ltd Crown-Gynn Advisors Ltd and Crown Advisors Ltd

was cause of violations by Crown Capital Management Ltd and Crown-Glynn Advisors

Ltd collectively Crown Captial of Section 204 of the Advisers Act and Rule 204-

2a12 thereunder Crown Capitals internal operating procedures required all

employees and affiliated persons to submit to Crown Capitals compliance officer on

quarterly basis personal trading reports identifying every transaction in securities in

which the individual had or as result of the transaction acquired direct or indirect

beneficial ownership and had investment discretion Although Bellet knew of these

internal operating procedures he failed to comply with them with respect to certain

transactions during the seven quarterly periods beginning in January 1997

From January 1997 through September 1998 personal brokerage accounts over which

Bellet had investment discretion engaged in several hundred transactions in securities in

which Bellet had or as result of the transactions acquired direct or indirect beneficial

ownership Bellet failed to disclose these transactions to Crown Capitals compliance

officer as required by Crown Capitals internal operating procedures Instead of

reporting his actual personal trades Bellet submitted personal trading reports that

contained fictitious transactions to Crown Capitals compliance officer over the course of

the seven quarterly periods

Bellets misconduct as described above with respect to his reporting of personal trades

to Crown Capital did not adversely affect the economic interests of Crown Capital the

partnerships or trust managed by Crown Capital or their respective clients or accounts

In January 1999 following the completion of routine field examination of Crown

Capital by the Commissions Northeast Regional Office Bellet voluntarily disclosed to

the Commission staff the fact that his prior personal trading reports during the seven

quarterly periods beginning in January 1997 were fictitious Bellet then voluntarily

submitted to the staff corrected personal trading reports as well as brokerage account

statements detailing his actual personal security transactions Rel IA-1979 File No 3-

10598

COMMISSION SANCTIONS LEGG MASON FUND ADVISER INC AND WESTERN

ASSET MANAGEMENT CO

On September 28 2001 the Commission instituted public administrative proceeding

against Legg Mason Fund Adviser Inc LM Fund Adviser and Western Asset

Management Co WAM pursuant to Section 203e of the Investment Advisers Act of

1940 for failing to reasonably supervise the portfolio manager for the Legg Mason High

Yield Portfolio and the U.S High Yield Investments N.y Legg Mason offshore fund

collectively Funds The portfolio manager with the assistance of broker-dealer

inflated the value of troubled securities which caused one of the funds materially to

overstate its net asset value

The order finds that the Funds manager LM Fund Adviser and the sub-adviser WAMfailed to reasonably supervise the portfolio manager LM Fund Adviser failed to have

adequate policies and procedures to respond adequately to indications that the portfolio

manager was overstating the value of one of the funds securities WAM failed to have

adequate policies and procedures designed to prevent securities violations by the

portfolio manager

Simultaneous with the institution of the proceeding LM Fund Adviser and WAMsubmitted Offers of Settlement in which while neither admitting nor denying the

Commissions findings they consented to the entry of an order in which they were each

censured they each agreed to pay penalt of $50000 and they were each ordered to

comply with undertakings to maintain the enhanced supervisory policies and procedures

previously implemented Rel IA-1980 File No 3-10600

ADMINISTRATIVE PROCEEDING INSTITUTED AGAINST RAJIV VOHRA OF

FORT LAUDERDALE FLORIDA

On September 28 2001 the Commission issued an Order Instituting Public Proceedings

Pursuant to Section 15b6 of the Securities Exchange Act of 1934 Order against

Rajiv Vohra of Fort Lauderdale Florida The Order alleges that Vohra participated in an

offering of penny stock The Order further alleges that on April 2001 final judgment

of permanent injunction was entered by consent against Vohra permanently enjoining

him from violations of the antifraud provisions of the federal securities laws SEC

Rajiv Vohra Sean Healey Lantern Investments Ltd Lipton Holdings Ltd and

Beaufort Holdings Ltd Civil Action No 00-CV-7286 S.D Fla.

The Commissions complaint in the district court action alleged that Vohra and others

used wash sales to create the appearance of active trading in penny stOck Vohra and

others then arranged to have false and misleading research report published on stock-

picker web site on their own web site and through unsolicited mass e-mails The

research report falsely claimed that the issuer of the stock had significantly expanded

that the author of the report was an independent analyst and that the purported analyst

had issued buy recommendation Vohra and others attempted to conceal their scheme

by conducting much of their activity through Canadian brokerage accounts and Bahamian

companies The defendants profited approximately $500000 from their scheme

hearing will be scheduled before an administrative law judge to determine whether the

allegations against Vohra are true and if so what sanctions if any are appropriate and in

the public interest Rel 34-44869 File No 3-10596

SEC SETTLES CIVIL ENFORCEMENT ACTION AGAINST FORMER PREXOMETOFFICER IN CONNECTION WITH FRAUDULENT OFFERING SCHEME

The Commission announced today that Judge Mary Lisi of the United States District

Court for the District of Rhode Island has entered by consent final judgment

permanently enjoining violations of the antifraud provisions of the federal securities laws

in the Commissions civil enforcement action against George Helm Jr resident of

North Smithfield Rhode Island and the former secretary and treasurer of Prexomet

Corporation On September 28 2001 the Commission also entered an Order Instituting

Proceedings Making Findings and Imposiig Remedial Sanctions by consent barring

Helm from participating in any offering of penny stock and association with any

broker or dealer with the right to reapply for association after three years The

Commissions order is based upon the entry of the permanent injunction in the civil

action

In its complaint the Commission alleged that Helm participated in scheme to defraud

14 investors out of approximately $240000 by inducing them to invest in Prexomet

now defunct Smithfield Rhode Island-based corporation According to the complaint

Helm told prospective investors that Prexomet owned valuable Arizona mine and

offered them an opportunity to purchase Prexomet stock at $1 per share Helm stated that

Prexomet would soon go public through an initial public offering IPO and that investors

would earn 500% return on their investments within several months These statements

were false because Prexomet did not own mine Moreover the Commission alleged

that neither Helm nor any of Prexomets other officers had any intention of taking

Prexomet public because neither Prexomet nor any of the officers ever filed any

document with the Commission or expended any funds to this end Once some of the

investors began raising questions about their investments Helm and Prexomets other

officers began making false lulling statements as early as April 1997 and continuing

through at least March 2000 about how Prexomet was about to receive an infusion of

capital and how the investors would receive their promised 500% returns In reality the

investors never received back any portion of either their original investments or of their

promised returns

Helm consented without admitting or denying the allegations of the Commissions

complaint to the entry of final judgment that permanently enjoins him from future

violations of Section 17a of the Securities Act of 1933 and Section 10b of the

Securities Exchange Act of 1934 and Rule lOb-S thereunder and orders him to pay civil

penalty of $20000

In related matter the Commission entered an administrative order by consent against

Helm who was registered representative of Royal Alliance Associates Inc

NewYork-based broker-dealer during the period at issue The administrative order bars

Helm from participatingin any offering of penny stock and association with any

broker or dealer with the right to reapply for association after three years The

Commissions order is based upon the entry of the permanent injunction in the civil

action SEC Kraemer et al Civil Action No 01-358 ML Rhode Island LR

17080 Re 34-44873 File No 3-10599

COMMISSION SANCTIONS TRUfflE WHITEHEAD


desist proceeding against portfolio manager Trudie Whitehead Whitehead

pursuant to Section 8A of the Securities Act of 1933 Securities Act Section 21C of the

Securities Exchange Act of 1934 Exchange Act Sections 203f and of the

Investment Advisers Act of 1940 Advisers Act and Sections 9b and of the

Investment Company Act of 1940 Investment Company Act

The order finds that from 1996 to 1998 Whitehead caused the Legg Mason High Yield

Portfolio High Yield Fund and the U.S High Yield Investments N.y Legg

Mason offshore fund collectively Funds to purchase securities underwritten by

former broker-dealer and one of its principals After the securities began performing

poorly and the issuers suffered severe financial problems Whitehead and the broker-

dealer principal defrauded the Funds by concealing the problems and inflating the value

of the troubled securities which caused the High Yield Fund to materially overstate its

net asset value

Simultaneous with the institution of the proceeding Whitehead submitted an Offer of

Settlement in which while neither admitting nor denying the Commissions findings she

consented to the entry of an order barring her from association with any investment

adviser or investment company Whitehead is ordered to cease and desist from

committing or causing any violation and any future violation of the antifraud provisions

of the Securities Act the Exchange Act and the rules thereunder the Advisers Act and

the books and records provisions of the Investment Company Act Whitehead is also

ordered to cease and desist from causing any violation and any future violation of the net

asset value provision of the Investment Company Act Further Whitehead is ordered to

pay $25000 penalty Rels 33-8018 34-44875 IA-1981 IC-25198 File No 3-10601

COMMISSION SANCTIONS KYLE KIRKLAND


desist proceeding against principal of former broker-dealer Kyle Kirkland

Kirkland pursuant to Section 8A of the Securities Act of 1933 Securities ActSections 5b6 and 21 of the Securities Exchange Act of 1934 Exchange ActSection 203k of the Investment Advisers Act of 1940 Advisers Act and Sections 9band of the Investment Company Act of 1940 Investment Company Act

The Order finds that from 1996 to 1998 Kirkland and his former broker-dealer

underwrote and sold securities to the Legg Mason High Yield Portfolio and the U.S High

Yield Investments N.y Legg Mason offshore fund collectively Funds After the

securities began performing poorly and the issuers suffered severe financial problems

Kirkland and the Funds portfolio manager defrauded the Funds by concealing the

problems and inflating the value of the troubled securities which caused the High Yield

Fund to materially overstate its net asset value

Simultaneous with the institution of the proceeding Kirkland submitted an Offer of

Settlement in which while neither admitting nor denying the Commissions findings he

consented to the entry of an Order barring him from association with any broker dealer

or investment company with the right to reapply for association after three years

Kirkland is ordered to cease and desist from committing or causing any violation and any

future violation of the antifraud provisions of the Securities Act the Exchange Act and

the rules thereunder the Advisers Act and the books and records provisions of the

Investment Company Act Kirkland is also ordered to cease and desist from causing any

violation and any future violation of the net asset value provisions of the Investment

Company Act Further Kirkland is ordered to pay $30000 penalty Rels 33-8019

34-44876 IA-1982 IC-25199 File No 3-10602

IJ THE MATTER OF EDWARD BRACKEN AND DOUGLAS DIGGThS

On September 28 2001 the Commission issued an Order Instituting Administrative

Proceedings Pursuant to Sections 15b and 19h of the Securities Exchange Act of 1934

Order against Edward Bracken Bracken and Douglas Diggins Diggins The two

were formerly employed as registered representatives at Solana Beach California branch

office of Cohig Associates Inc broker-dealer firm based in Denver Colorado

The Division of Enforcement alleges in the Order that on January 26 2000 Bracken was

convicted of one count of an information charging him with conspiracy to commit

securities fraud and wire fraud U.S Edward Bracken No CR-S-97-022-LDG

Nev. In plea agreement Bracken admitted that while associatedwith Cohigs office

in Solana Beach California he conspired with others including Michael Swan Swanthen the president of Teletek Inc to receive undisclosed payments in return for selling

Teletek stock to investors In his plea agreement Bracken further admitted that he failed

to disclose this extraordinary compensation to iiivestors

The Division of Enforcement further alleges that on March 2000 Diggins was convicted

of one count of an information charging him with conspiracy to commit securities fraud

and wire fraud U.S Douglas Diggins No CR-S-96-271-PMIP Nev. In plea

agreement Diggins admitted that while associated with Cohigs office in Solana Beach

he conspired with others including Swan to receive undisclosed payments in return for

selling Teletek stock to investors Diggins further admitted that he failed to disclose this

extraordinary compensation to investors

hearing will be held at time and place to be scheduled before an administrative law

judge to determine whether the allegations contained in the Order are true to provide

Bracken and Diggins an opportunity to dispute these allegationsand what if any sanctions

are appropriate in the public interest and for the protection of investors against Bracken and

Diggins Rel 34-44877 File No 3-10603

THE MATTER OF THOMAS CAREY AND FRANK MARSELLA

On September 28 2001 the Commission issued an Order Instituting Administrative

Proceedings Pursuant to Sections 15b and 19h of the Securities Exchange Act of 1934

Order against Thomas Carey Carey arid Frank Marsella Marsella The two were

formerly employed as registered representatives at Solana Beach California branch office

of Cohig Associates Inc broker-dealer firmbased in Denver Colorado

The Division of Enforcement alleges in the Order that on April 2000 Carey was

convicted of one count of an indictment charging him with conspiracy to commit

securities fraud and wire fraud U.S Thomas Carey No 99CR-1514-JM S.D Cal. In

plea agreement Carey admitted that while associated with Cohig he received

extraordinary compensation above and beyond his normal commission in return for

retailing the stock of Eagle Holdings Inc Eagle to his customers Carey further

admitted that he failed to disclose this extraordinary compensation to investors and that

trade confirmations sent to Cohig customers who purchased Eagle stock were misleading

in that the confirmations did not disclose the total compensation Carey would receive for

recommending Eagle stock to the customers

The Division of Enforcement further alleges that on April 2000 Marsella pled guilty to

one count of an indictment charging him vith conspiracy to commit securities fraud and

wire fraud U.S Frank Marsella No 99CR-1514-JM S.D Cal. In plea agreement

Marsella admitted that while associated with Cohig he received extraordinary

compensation above and beyond his normal commission in return for retailing the stock

of Eagle to his customers that he failed to disclose this extraordinary compensation to

investors and that trade confirmations sent to his customers were false and misleading

because they omitted to disclosed his total compensation

hearing will be held at time and place to be scheduled before an administrative law

judge to determine whether the allegations contained in the Order are true to provide Carey

and Marsella an opportunity to dispute these allegations and what if any sanctions are

appropriate in the public interest and for the protection of investors against Carey and

Marsella Rel 34-44878 File No 3-10604

COMMISSION APPROVES SETTLEMENT IN THE ADMINISTRATIVEPROCEEDING IN THE MATTER OF KEVIN QUINN

On September 28 2001 the Commission settled an administrative proceeding In the

Matter of Kevin Quinn The Commissions order vacated the Order of the

Administrative Law Judge dated May 16 2001 and provided notice that pursuant to Rule

360e of the Commissions Rules of Practice the Administrative Law Judges initial

decision Kevin Quinn Initial Decision Release No 1896 July 27 20019 has become

the final decision of the Commission The decision dismissing the proceedings against

Kevin Quinn was declared effective Rels 33-8020 34-44879 File No 3-10098

COMMISSION SANCTIONS DUFF PHELPS INVESTMENT MANAGEMENT COAND WAYNE STEVENS AND INSTITUTES ADMINISTRATIVE PROCEEDINGSAGAINST CHRIS WOESSNER

On September 28 2001 the Commission instituted settled administrative proceedings

against Duff Phelps Investment Management Co and its former president Wayne

Stevens and instituted contested administrative proceeding against Chris Woessner

former vice president of sales for Duff The proceedings concern the parties roles in

scheme to direct approximately $715000 of Duffs client commissions for the benefit of

broker-dealer and pension consultant in eAchange for the referral of client to Duff

In the settled proceedings the respondents consented to Orders of the Commission

without admitting or denying the Commissions findings requiring that they cease and

desist from violating certain federal securities laws censuring Duff and ordering it pay

$100000 penalty and approximately $715000 in disgorgement to its affected clients and

ordering Stevens to pay penalty of $20000 In the contested proceeding the Division

of Enforcement seeks remedial sanctions against Woessner

In the Commissions Orders in both the settled and contested proceedings the Division of

Enforcement alleges that from 1994 through 1997 Duff registered investment adviser

directed approximately $613000 of advisory client commissions for the benefit of East

West Institutional Services Inc then registered broker-dealer and $102000 for the

benefit of an unrelated pension consultant in exchange for the referral of client

pension fund for the International Brotherhood of Teamsters Union Local 710 East West

was able to influence the Local 710 because it had an arrangement with two trustees of

the Local 710 who received illegal kickbacks of commissions from East West The

pension consultant was hired by the Local 710 to provide advice concerning the selection

of new investment advisers

In violation of federal securities laws Duff did not disclose to its clients its direction of

brokerage in exchange for client referral and it falsely stated in its Commission filings

that it did not direct commissions in exchange for client referrals Woessner acting on

behalf of Duff entered the agreements to direct brokerage for the benefit of East West

and the pension consultant in exchange for Duffis management of $120 million of the

Local 710 pension fund and helped to conceal these arrangements from Duffs clients

Stevens as Duffs president chief executive officer and chief investment officer

approved the direction of brokerage to East West and was reckless in not knowing about

Woessners arrangement to direct brokerage to East West in exchange for client

referral

The settled Orders require that Duff and Stevens cease and desist from future violations

of the antifraud provisions of the Investment Advisers Act of 1940 2061 and

2062 and that Duff cease and desist from future violations of certain reporting

provisions of the Advisers Act 207 and 204 and Rule 204b1 thereunder

and of Section 17e1 of the Investment Company Act of 1940 Duff must also provide

to clients an amended Form ADV Part II distribute copy of the Order against it to all

its current clients and all its prospective clients for one year and retain an independent

consultant to review its supervisory compliance and other policies and procedures

Stevens must cause any investment adviser with which he is affiliated to distribute copy

of the Order against him to all its current clients and to all prospective clients for one

year

In the contested Order the Division of Enforcement alleges that Woessner aided and

abetted and caused Duffs violations of Sections 2061 and 2062 of the Advisers Act

East West and its registered representative Christopher Roach are respondents in

pending administrative proceeding concerning similar conduct re Rothmeier et al

Advisers Act Rel No 1823 September 1999 In the Matter of Wayne Stevens

Rel IA-1983 File No 3-10605 In the Matter of Duff Phelps Investment Management

Co Inc Rel IA-1984 IC-25200 File 3-10606 In the Matter of Chris Woessner

Rel IA-1985 File No 3-10607

ADMINISTRATIVE AND CEASE AND DESIST PROCEEDINGS INSTITUTED

AGAINST BENEFIT CONCEPTSGROUP INC AND JAMES CANNON


desist proceedings against Benefit Concepts Group Inc Benefit Concepts an investment

adviser and its presidentand owner James Cannon Cannon Benefit Concepts located

in Arlington Virginia was registered with the Commission from March 1998 until July 31

2001

In the Order Instituting Public Proceedings Order the Division of Enforcement

Division alleges that from approximately May 1999 through at least January 2001

Benefit Concepts through Cannon engaged in fraudulent course of conduct to attract

clients by preparing and distributing false and misleading advertisements in which

Benefit Concepts claimed performance for years in which it had no investment advisory

clients In addition Cannon and Benefit Concepts failed to disclose that no basis existed

for substantial portion of its claimed performance record or the fact that its performance

record was not derived using proprietary software or any market-timing model as the

advertisements claimed in addition from approximately mid-1998 through at least

September 2000 Benefit Concepts failed to maintain records necessary to substantiate its

advertised performance claims

The Division alleges that in spring 1999 approximately one year after Cannon registered

Benefit Concepts as an investment adviser and first began to provide investment advice

to clients Cannon began to aggressively advertise Benefit Concepts Benefit Concepts

through Cannon advertised false and misleading performance results in publications

brochures website and through press releases The performance figures contained in

all of the advertisements that claimed returns for Benefit Concepts clients as far back as

1995 had no basis in fact Moreover Benefit Concepts falsely claimed that it had long

history of managing investment advisory client accounts when it actually had no

investment advisory clients until spring 1998

The Division further alleges that based on false information provided by Cannon the

publication Nelsons Worlds Best Money Managers ranked Benefit Concepts second out

of 897 money managers in the category U.S Equity money managers based on the

companys reported five-year annualized rate of return for the five years ending March

31 2000

The Division alleges that Benefit Concepts aided and abetted by Cannon willfully

violated Sections 204 2061 2062 and 2064 of the Investment Advisers Act of 1940

and Rules 204-2a16 and 2064-1a5 thereunder

hearing will be scheduled before an administrative judge to determine whether the

allegations contained in the Order are true to provide Benefit Concepts and Cannon an

opportunity to dispute these allegations and to determine what sanctions if any are

appropriate and in the public interest Rel 34-44880 IA-1986 File No 3-10608

SEC SETTLES FRAUD CLAIMS AGAINST OWNER OF STOCK-PICKING WEBSITE

The Commission announced that it has irged the operator of Financial Picks an

Internet-based stock-picking service with fraudulently inflating his past performance

results and claiming to be part of an experienced team of professionals with long track

record of successful investment advice In fact Daniel Murphy 26 of Mission Viejo

California operated the website alone and substantially overstated the results of past

investment recommendations

On September 28 2001 the Commission instituted administrative cease and desist

proceedings against Daniel Murphy d/b/a Financial Picks In its order the Commission

found that Murphy lured subscribers with fraudulent claims of past success and

distortions about Murphys qualifications collecting approximately $65000 in fees from

about 200 subscribers during the period the misrepresentations were included on the

website The Financial Picks website featured prominent graphics claiming to show that

Murphys past recommendations had resulted in trading gains of 185% to 1800% per

year The Commission found that had investors followed the recommendations actual

returns would have been significantly lower Murphy further claimed that Ive been

trading since the mid 80s when computers were mostly word processors yet Murphy

was ten years old in the mid-1980s and he did not open his first brokerage account until

1997 Murphy also claimed on the website that must rely on the expertise of my co

workers before any decision is made in fact Murphy operates Financial Picks alone and

has no co-workers Finally the website stated that Murphy made every trade

recommended by Financial Picks however according to the Commission Murphy

seldom traded the securities he recommended to Financial Picks subscribers

The Commission accepted an offer of settlement in which Murphy without admitting or

denying the Commissions findings agreed to cease and desist from committing or

causing violations of the antifraud provisions of the federal securities laws Section 10b

of the Securities Exchange Act of 1934 and Rule lOb-5 thereunder Rel 34-4488 File

No 3-10609

SEC IMPOSES CEASE AND DESIST ORDER CIVIL PENALTY AND OTHER

RELIEF AGAINST PRESIDENT OF MINNESOTA IN VESTMENT COMPANY

On September 28 2001 the Commission entered an Order Instituting Public

Administrative and Cease and Desist Proceedings Pursuant to Section 21C of the

Securities Exchange Act of 1934 and Sections 9b and 9f of the Investment Company

Act of 1940 Making Findings and Imposing Remedial Sanctions Order against

Lawrence Grady Grady president of Minn Shares Inc Minn Shares registered

closed-end investment company based in Minneapolis Minnesota Without admitting or

denying its findings except as to the Commissions jurisdiction Grady consented to the

entry of the Order which requires him to pay civil penalty of $10000 plus post-

judgment interest and to cease-and-desist from committing or causing any violation

and any future violation of Sections 10b and 14a of the Securities Exchange Act of

1934 Exchange Act and Rules lOb-5 14a-6b and 14a-9 thereunder and Sections

17j 20a and 34b of the Investment Company Act and Rules 17j-1c1

redesignated as Rule 17j-1d1 and 20a-1 thereunder and ii causing any violation

and any future violation of Sections 17a1 17g 17j and 30d redesignated as

Section 30e of the Investment Company Act and Rules 17g-1 17j-1b1

redesignated as Rule 17j-1c1 and 30d thereunder The Order also prohibits Grady

from serving or acting as an employee officer director member of an advisory board

investment adviser or depositor of or principal underwriter for registered investment

company or affiliated person of such investment adviser depositor or principal

underwriter with the right to reapply to the Commission to serve or act in any such

capacity after three years from the date of the Order

In the Order the Commission found that Grady failed to ensure his and Minn Shares

compliance with the Investment Company Act in that from Minn Shares inception in

August 1993 until on or about November 1998 Minn Shares operated without

written code of ethics to prevent its access persons from engaging in fraudulent conduct

in connection with the purchase or sale of any security held or to be acquired by it as

required by Section 17j of the Investment Company Act and former Rule 17j-1b1

redesignated as Rule 17j-1c1 thereunder ii Grady failed to report his personal

securities transactions to Minn Shares from August 1993 until in or about January 1999and failed to report his wifes securities transactions to Minn Shares at anytime as

required by Section 17j of the Investment Company Act and former Rule 17j-1c1thereunder redesignated as Rule 17j-1d1 iii in or about November 1998 Grady

failed to file with the Commission Minn Shares proxy statement as required by Section

20a of the Investment Company Act and Rule 20a-1 thereunder iv from August 1993

to the present Grady caused Minn Shares to operate withoutfidelity bond as required

under Section 17g of the Investment Company Act and Rule 17g-1 thereunder from

August 1993 until in or about February 1999 Grady caused Minn Shares to fail to

transmit to its shareholders required reports or other information containing financial

information on at least semi-annual basis as required by former Section 0dredesignated as Section 30e of the Investment Company Act and Rule 30d-1

thereunder and vi on or about September 21 1995 Grady caused Minn Shares

director an affiliated person as defined in Section 2a3D of the Investment Company

Act to engage in prohibited transaction with Minn Shares in violation of Section

17a1 of the Investment Company Act The Commission also found that although

Minn Shares had never been in compliance with the Investment Company Act Grady

falsely stated that Minn Shares intended to remain in compliance with the Investment

Company Act to Minn Shares shareholders and other members of the public in two

proxy statements in violation of Sections 10b and 14a of the Exchange Act and Rules

lOb-S and 14a-9 thereunder and Sections 20a and 34b of the Investment Company Act

and Rule 20a-l thereunder Rel 34-44882 IC-25201 File No 3-106 10

COMMISSION INSTITUTES CEASE AND DESIST AND ADMINISTRATIVEPROCEEDINGS AGAINST ROBERT LOHANN RGISTERED SECURITIESPROFESSIONAL

On September 28 2001 the Commission issued an order instituting public cease and

desist and administrative proceedings against Robert Lohmann pursuant to Sections

15b6 and 21C of the Securities Exchange Act of 1934 Exchange Act and Section

203f of the Investment Advisers Act of 1940 Advisers Act

In the order the Division of Enforcement alleges that Lohmann engaged in insider

trading violations prior to the November 24 1997 public announcement that Mapco

Incorporated would be acquired by The Williams Companies in deal worth

approximately $3.46 billion At the time of the alleged conduct Lohmann was

registered securities professional and employed as supervisor of equity trading at RoyalAlliance Associates Inc registered broker-dealer and investment adviser The

Division alleges that Lohmann illegally tipped other persons including co-worker who

traded Mapco stock based on Lohmanns tip The Division alleges that Lohmann thereby

violated the antifraud prohibitions contained within Section 10b of the Exchange Act

and Rule lOb-5 thereunder

The Division further alleges that Lohmann learned material nonpublic information

concerning the Mapco acquisition from childhood friend John Doherty who himself

obtained the inside information from Mapco employee in series of conversations

beginning the morning of November 20 1997 Doherty told Lohmann about the merger

including when the merger might occur and the $46 per share buy out price of the Mapco

stock In one such conversation Doherty explicitly told Lohmann that the information

came from one of the head guys at Mapco After that point Lohmann tipped others

about the merger including co-worker who purchased Mapco stock and made profit

hearing will be scheduled before an administrative law judge to determine whether the

allegationsin the order are true to provide Lohmann an opportunity to dispute these

allegations and to determine what if any remedial actions or sanctions are appropriate

including the issuance of cease and desist order and the imposition of civil penalty

pursuant to Section 21B of the Exchange Act and Section 203i of the Advisers Act

Rel 34-44883 IA-1987 File No 3-1061

COMMISSION SUES TRANS ENERGY INC LOREN BAGLEY AND WILLIAM

WOODBURN FOR FRAUD

On September 28 2001 the Commission filed lawsuit in federal district court charging

Trans Energy inc Trans Energy its president Loren Bagley Bagley and its vice

president and principalfinancial officer William Woodburn Woodburn with making

false and misleading statements to the investing public through press releases website

postings and Commission filings Trans Energy is public company whose stock is

quoted on the OTC Bulletin Board under the symbol TSRG The complaint alleges that

Trans Energy Bagley and Woodburn violated the antifraud and reporting provisions of

the federal securities laws

According to the complaint from October 2000 through December 2000 Trans Energy

issued public statements that grossly overstated the value of its assets in Wyomings

Powder River Basin inaccurately minimized its auditors going concern opinion and

falsely described its Chapter involuntary bankruptcy proceeding The complaint further

charges that Trans Energys Commission filings from 1998 through 2000 withheld

material information about one lawsuit pending against the company and failed to

disclose the existence of another The two lawsuits allegedly misrepresented and omitted

in Trans Energys Commission filings resulted in entry of over $1 million in consent

judgments against the company According to the complaint Bagley and Woodburn

were responsible for the false and misleading statements The Commission is seeking in

an injunction against Trans Energy Bagley and Woodburn prohibiting future violations

of the anti-fraud and reporting provisions of the federal securities laws and penalties

against Bagley and Woodburn Trans Energy Inc Loren Bagley and

William Woodburn Civil Action No 101CV02060 USDC D.D.C.J LR-17 159

FORMER GENEVA SECURITIES ThC OFFICERS SUED FOR SECURITIES FRAUD

On September 28 2001 the Commission filed an action in the United States District

Court for the Northern District of Illinois inst Richard Eisenmenger and LeRoy

Messenger the President and Chief Financial Officer respectively of Geneva Securities

Inc defunct broker-dealer formerly based in Schaumburg Illinois The Commissions

complaint alleges that Eisenmenger and Messenger sold over $11 million of preferred

stock and notes of companies they owned while making material misstatements about the

use of the funds raised the debts the companies would become obligated to pay and the

collateral protecting the investments Further the complaint alleges that Eisenmengersold investments that were unsuitable for some of his customers many of whom were

elderly and retired used customer funds to purchase securities without their permission

and diverted assets of certain customers to the accounts of Geneva-affiliated companies

Eisenmenger and Messenger without admitting or denying the allegations in the

complaint have consented to the entry of Orders enjoining them from further violations

of the anti-fraud provisions of the federal securities laws Richard

Eisenmenger and Leroy Messenger U.S District Court for the Northern District of

Illinois Civil Action No 01 7506 N.D Ill LR-17 162

SUMMARY JUDGMENT ENTERED AGAINST RICHARD BLECH

An Order for Summary Judgment and permanent injunction have been entered against

Richard Jonathan Blech the founder and cnief executive officer of Credit Bancorp Ltdenjoining him from future violations of the antifraud provisions of Section 17a of the

Securities Act of 1933 Section 10b of the Securities Exchange Act of 1934 and Rule

Ob-5 thereunder

The court found that Credit Bancorp which was based in Geneva Switzerland and Blech

obtained investments of at least $180 million in marketable securities by promising

individuals risk-free return of 4% to 14% year without relinquishing ownership of

their securities The returns were to be generated by placing the securities in trust

accounts established at major financial institutions in the name of Credit Bancorp Major

European banks were then to provide credit lines based on the value of the securities in

the trust accounts and the credit lines were to be used to invest in trading programwhich would generate the promised returns However rather than being deposited in

trust accounts the securities were placed in brokerage accounts maintained by Credit

Bancorp and then margined or sold outright with the proceeds being wired to bank

accounts in the United States and Switzerlind These proceeds were then used to fund

the operations of Credit Bancorp and Blechs lavish personal lifestyle Among other

purchases Blech bought manor house in Monnetier-Mornex France automobiles and

yacht which was moored on the Cote dAzur in France Blech is currently being held in

prison in France awaiting extradition to the United States where criminal charges have

been filed

The Commission acknowledges the assistance of the United States Attorneys Office for

the Southern District of New York the Federal Bureau of Investigation the Ministry of

the Interior of the Republic of France the Police Department of the Principality of

Monaco and the Office of the Magistrate of the Canton of Geneva of the Republic of

Switzerland Credit Bancorp Ltd et al Docket No 99 Civ 11395 RWSUSDC SDNY LR-17163

CIVIL INJUNCTIVE ACTION FILED AGAINST GILBERT WYNNE RICHARD

DEAR KINGDOM GROWTH FUND LTD KINGDOM FINANCIAL SERVICES

ORTHODOX CHURCH OF JESUS CHRIST INC AND STEPHEN BEIK

On September 28 2001 the Commission Liled complaint in federal district court in

Philadelphia Pennsylvania charging that Gilbert Merrell Wynne and Richard Dear

engaged in fraudulent scheme through the public offer and sale of securities issued by

three entities controlled by Wynne namely Kingdom Growth Fund Ltd Kingdom

Financial Services and Orthodox Church of Jesus Christ Inc The complaint charges that

from at least November 1998 through November 1999 Wynne Dear and their

salespersons fraudulently sold at least $2.2 million of the securities to more than 200

investors in Pennsylvania and other states They did so by representing that the

investments were risk free and would generate guaranteed returns of 15-20 percent per

month by investing in so-called prime bank instruments In actuality those instruments

did not exist and there was no reasonable basis for guaranteeing the exorbitant returns

Instead of investing the proceeds as promised Wynne used them to pay personal and

business expenses returns owed to existing investors and commissions to Dear and other

salespeople

In its complaint the Commission also charges Stephen Beik an attorney practicing in

Maitland Florida with aiding and abetting ihe fraudulent scheme Among other things

Beik drafted offering documents acted as escrow agent for investor funds and

transferred those funds to offshore accounts after learning of the Commissions

investigation

The complaint allegesthat Wynne Dear Kingdom Growth Fund Ltd Kingdom

Financial Services and Orthodox Church of Jesus Christ Inc violated Sections 5a 5cand 17a of the Securities Act of 1933 and Section 10b of the Securities Exchange Act

of 1934 and Rule lOb-5 thereunder The complaint also alleges that Beik aided and

abetted the antifraud violations of the Exchange Act In addition the complaint alleges

that Wynne and Dear violated the broker-dealer registration provisions of the Exchange

Act The complaint seeks permanent injunctions disgorgement prejudgment interest and

civil penalties against each defendant Gilbert Merrell Wynne et al Civil Action

No 01-4936 USDC EDPa LR-17164

FORMER OAKGRIGSBY 1IC CONTROLLER ENJOINED ORDERED TO PAY

DISGORGEMENT IN CONNECTION WITH FINANCIAL FRAUD SCHEME

The Commission announced that on September 27 2001 the Hon Ronald Guzm�n of

the United States District Court for the Northern District of Illinois entered an Order

enjoining Defendant Matthew Welch from future violations of the antifraud issuer

reporting books and records and internal accounting controls provisions of the federal

securities laws and ordering him to pay disgorgement and prejudgment interest of

$21526 provided however that payment of all but $10000 is waived and penalties not

assessed based on his demonstrated inability to pay additional amounts Welch

consented tc the entry of the Order without admitting or denying the allegations of the

Commissions complaint At the time of the conduct alleged in the complaint

OakGrigsby was subsidiary of Oak Industries Inc publicly-traded issuer

headquartered in Waltham Massachusetts The complaint alleged that between July

1995 and January 1997 Defendants Welch and Home effected the scheme by directing

series of fraudulent entries in OakGrigsbys books which improperly capitalized certain

expenses thereby increasing the divisions reported profits As part of the scheme

Welch the former Controller of OakGrigsby fraudulently concealed expenses such as

salaries shipping and travel The Complaint alleged that several of these fraudulent

entries were made with the knowledge and approval of Defendant Home the divisional

CEO of OakGrigsby

As result of Welch and Homes actions Oaks income and earnings per share for the

quarter ended December 31 1995 and the quarters ended March 31 June 30 and

September 30 1996 were materially overstated and accounts payable were materially

understated During the period of the fraud Oaks income and earnings per share were

overstated in amounts ranging from 2% to 15% and accounts payable for year-end 1995

and the three quarters of 1996 were understated in amounts ranging from 5% to 13%Because the fraud was centered at OakGrigsby the divisions operating profits were

overstated by much greater amount ranging from 108% to 371% For further

information see Litigation Release No 16734 Matthew Welch and James

Home Civ No OOC-5935 USDC N.D Ill LR-17165 AAE Rel 1461

IN VESTMENT COMPANY ACT RELEASES

ORDERS OF DEREGISTRATION UNDER TF IN VESTMENT COMPANY ACT

Orders have been issued under Section 8f of the Investment Company Act declaring that each

of the following has ceased to be an investment company

Minn Shares Inc No 811-7744

Rel IC -25176 September 27 2001Mutual Selection Fund Inc No 811-2300

Rel IC -25177 September 27 2001Credit Suisse Warburg Pincus Small Company Value II Fund

Inc No 811-7375

Rel IC -25178- September 27 2001Zero Gravity Funds No 811-9787

Rel IC -25179 September 27 2001Dreyfus Global Bond Fund Inc No 811-7085

Re IC -25180- September27 2001Allegiance Investment Trust-American Value Fund No.811-9185

Rel IC -25181 September 27 2001TD Waterhouse Family of Funds No 811-9543

Re IC -25182 September 27 2001

Virtus Funds No 811-6158


SG Cowen Standby Tax-Exempt Reserve Fund Inc No.811-4344

Rel IC -25184 September 27 2001

MuniHoldings California Insured Fund In. No 811-9313


MuniHoldings Florida Insured Fund No 811-9331


MuniHoldings New Jersey Insured Fund IV Inc No.811-93 15


MuniHoldings New York Insured Fund IV Inc No 811-9317


Credit Suisse Institutional Strategic Global Fixed Income Fund Inc No 811-

893


GTBD Fund L.L.C Deauville Europe Fund L.L.CNo 811-10225


Multistate Tax Exempt Unit Trust No 811-2774


NSB Asset Fund Inc No 81 1-10031


Morgan Stanley Dean Witter World Wide Income Trust No 811-5744


NOTICES OF DEREGISTRATIONS UNDER THE IN VESTMENT COMPANY ACT

For the month of September 2001 notice has been issued giving interested persons

until October 23 2001 to request hearing on any of the following applications for an

order under Section 8f of the Investment Company Act declaring that the applicant has

ceased to be an investment company

IAI Investment Funds II Inc No 811-7690

IAI Investment Funds IV Inc No 811-3004

IAI Investment Funds VIII Inc No 811-3767

TM Investment Funds Inc No 811-2747

IAI Investment Funds III Inc No 811-4904

TM Investment Funds VI Inc No 811-5990

TM Investment Funds VII Inc No 811-2147

Legg Mason Total Return Trust Inc No 811-4308

Investment Series Trust No 811-5093

The Starburst Funds II No 811-6119

Scudder Weisel Capital Entrepreneurs Fund No 811-10169

Scudder Weisel Capita Funds No 811-10251

Blanchard Funds No 811-4579

23 NEWS DIGEST October 2001

Putnam Investment Grade Municipal Trust III No 811-7099California Municipal Cash Trust No 811-5760

The Harvest Funds No 811-9211

Automated Cash Management Trust No 811-3351

New York Municipal Cash Trust No 811-3432Beacon Global Advisors Trust No 811-7879

Targeted Duration Trust No 811-6085

Rel IC-25 197 September 28

SELF-REGULATORY ORGANIZATIONS

IMMEDIATE EFFECTIVENESS OF PROPOSED RULE CHANGE

proposed rule change filed by the National Association of Securities Dealers to extend

pilot program clarifying Nasdaqs authority to initiate and continue trading halts SRNASD-2001-60 has become effective under Section 19b3A of the Securities

Exchange Act of 1934 Publication of the proposal is expected in the Federal Register

during the week of October Re 34-44870

SECURITIES ACT REGISTRATIONS

The following registration statements have been filed with the SEC under the Securities Act

of 1933 The reported information appears as follows Form Name Address and Phone

Number if available of the issuer of the security Title and the number and/or face amount

of the securities being offered Name of the managing underwriter or depositor if

applicable File number and date filed Assigned Branch and designation if the statement

is New Issue

Registration statements may be obtained in person or by writing to the Commissions Public

Reference Branch at 450 Fifth Street N.W Washington D.C 20549 or at the following

mail box address publicinfosec.gov In most cases this information is also available

on the Commissions website www.sec.gov

F-6 FISHER PAYKEL INDUSTRIES LTD /ADR/ JUSTIN CALLAHAN22982 ALCADE DR STE 101 LAGUNA HIIT CA 92653 949 470390020000000 $1000000 DEPOSITARY rCEIPTS FOR COMMON STOCK FILE33313924 SEP 20 BR 99 NEW ISSUE

RECENT 8K FILINGS


Form 8-K is used by companies to file current reports on the following events

Changes in Control of Registrant

Acquisition or Disposition of Assets

Bankruptcy or Receivership

Changes in ReGistrants Certifying Accountant

Other MaterialTy Important Events

Resignations ot Registrants Directors

Financial Statements and Exhibits

Change in Fiscal Year

Reguration FD Disclosure

The followino companies have filed 8-K reports for the date indicated and/or amendments to 8-K reports

previously fiIed responding to the iternslof the form specified 8-K reports may be obtained in person

or by writing to the Commissions Public Reference Branch at 450 Fifth Street N.W Washington D.C20549 or at the following e-mail box address pubhcinfosec.gov In most cases this information is

also available on the Commissions website www.sec.gov

N4E OF ISSUER

STATE 8K ITEM NOCODE DATE COdENT

ACCUMED INTERNATIONAL INC

AIRTRAN AIRWAYS INC

AIRTRAN HOLDINGS INC

ALLBERRY INC

ALLTRISTA CORP

AMERICAN HEALTHWAYS INC

AMERIGON INC

AMSOUTH AUTO TRUST 2000-1

APACHE MOTOR CORP

ASIA SUPERNET CORP

AVALONBAY COMMUNITIES INC

BA MASTER CREDIT CARD TRUST

BALDWIN LYONS INC

BANYAN CORP /oR/

BARNETT AUTO TRUST 1997-A

BARTON BEERS LTD

BARTON BRANDS LTD /DE/

BARTON BRANDS OF CALIFORNIA INC

BARTON BRANDS OF GEORGIA INC

BARTON CANADA LTD

BARTON DISTILLERS IMPORT CORP

BARTON FINANCIAL CORP

BARTON INC

BATAVIA WINE CELLARS INC

BEAR STEARNS COMPANIES INC

BETA OIL GAS INC

BION ENVIRONMENTAL TECHNOLOGIES INC

BLUE ZONE INC

BOSTON BEER CO INC

BRIDGE INTERNET SOLUTIONS INC

CALPINE CORP

CANANDAIGUA

CANANDAIGUA EUROPE LTD

09/17/01

09/27/01

09/27/01

09/25/01

09/25/01

09/28/01

09/20/01 AMEND

09/17/01

09/12/01

06/21/01 AMEND

09/26/01

09/17/01

09/11/01

09/24/01

09/17/01

09/25/01

09/25/01

09/25/01

09/25/01

09/25/01

09/25/01

09/25/01

09/25/01

09/25/01

09/26/01

09/30/01

09/06/01

09/28/01

09/28/01

09/19/01

09/19/01

09/25/01

09/25/01

ItemItem

Item

Item

Item

Item

Item

Item

Item

xx

DE

DE

NV

DE

IN

DE

CA

NY

NV

CO

MD

IN

OR

DE

MD

DE

CT

GA

DE

NY

DE

DE

NY

DE

NV

CO

NV

MADR

DR

DE

NY


STATE 8K ITEM NONAME OF ISSUER CODE DATE COMMENT

CANANDAIGUA LTD

CANANDAIGUA WINE CO INC /NY/

CECS CORP

CHEVRON CORP

CHEVRON CORP

CHEVY CHASE BANK FSB

CHICAGO BRIDGE IRON CO

CHICAGO BRIDGE IRON CO

CHORDIANT SOFTWARE INC

CISCO SYSTEMS INC

CIT EC EF 2001-A

CLOUD PEAK CORP

COIVOVIODORE APPLIED TECHNOLOGIES INC

COMMUNITY INVESTMENT PARTNERS LP

CONSTELLATION BRANDS INC

COUNTY BANK CORP

COVANTA ENERGY CORP

COVEST BANCSHARES INC

CROWN CRAFTS INC

CT COMMUNICATIONS INC INC

CWMBS INC

DEMEGEN INC

DOBSON COMMUNICATIONS CORP

DOVER CORP

DPL INC

EAST COAST POWER LLC

EATON CORP

ECHOSTAR COMMUNICATIONS CORP

ENGAGE INC

ENTROPIN INC

ESTEE LAUDER COMPANIES INC

EXTEN INDUSTRIES INC

FAB INDUSTRIES INC

FIRST UNION REAL ESTATE EQUITY MO

RTGAGE INVESTMENTS

FORD CREDIT FLOORPLAN LLC

FORD CREDIT FLOORPLAN MASTER OWNER

TRUST SERIES 2001-2

FRANCISCAN VINEYARDS INC

GENERAL MOTORS ACCEPTANCE CORP

GENESIS MICROCHIP INC

GENUITY INC

GLOBAL MARINE INC

GOURNETMARKET COM INC/CA

GPU INC /PA/

GREENPOINT CREDIT MAN HOUSING CONT

TR PAS THR CERT SER 01

GREENPOINT CREDIT MANUFACTURED HOUS

ING CONT TRU SER 2001-2

HEALTHCARE REALTY TRUST INC

HERITAGE COMMERCE CORP

09/25/01

09/25/01

9/2 8/01

09/26/01

09/26/01

09/09/01

02/07/01 AMEND

07/01/01

09/17/01

09/26/01

09/14/01

09/25/01

09/28/01

09/26/01

09/25/01

09/28/01

09/28/01

09/28/01

07/23/01 AMEND

09/14/01

09/28/01

07/16/01 AMEND

09/14/01

09/28/01

09/25/01

09/25/01

09/28/01

09/28/01

09/25/01

09/08/01

09/28/01

09/13/01

09/25/01

09/28/01

08/31/01

08/31/01

09/25/01

09/26/01

09/27/01

09/21/01

09/28/01

09/13/01 AMEND

09/26/01

08/31/01

09/26/01

09/28/01

09/28/01

NY

NY

DE

DE

DE

MD

DE

CA

DE

DE

DE

MO

DE

MI

DE

DE

GA

NC

DE

CO

OK

DE

OH

DE

OH

NV

DE

CO

DE

DE

DE

OH

DE

DE

DE

DE

DE

DE

DE

PA

CA

MD

CA


NNE OF ISSUER

STATE

CODE

8K ITEM NO12345678 DATE COMMENT

HOPFED BANCORP INC

ERSI FUNDING INC II

HUMBOLDT BANCORP

IBIS TECHNOLOGY CORP

lBS INTERACTIVE INC

INSILCO HOLDING CO

INSILCO TECHNOLOGIES INC

INTER CONTINENTAL SERVICES CORP

IONIC FUEL TECHNOLOGY INC

JERSEY CENTRAL POWER LIGHT CO

KIRLIN HOLDING CORP

KLEVER MARKETING INC

KLEVER MARKETING INC

LEWIS CORP

MAJOR AUTOMOTIVE COMPANIES INC

MDU RESOURCES GROUP INC

MELTRONIX INC

MERRILL LYNCH CO INC

METROPOLITAN EDISON CO

MISSION RESOURCES CORP

MONARCH IMPORT CO

MT VEEDER CORP

NATIONSBANK OF DELAWARE NA

NATIONSCREDIT GRANTOR TRUST 1996-1

NATIONSCREDIT GRANTOR TRUST 1997-1

NEOPHARM INC

NETMAXIMIZER CON INC

NEW VISUAL CORP

NOVASTAR MORTGAGE FUNDING CORP

NOVASTAR MORTGAGE FUNDING CORP

OCEAN ENERGY INC /TX/

OMNICARE INC

OREGON TRAIL FINANCIAL CORP

OREGON TRAIL FINANCIAL CORP

ORIENTAL FINANCIAL GROUP INC

ORION POWER HOLDINGS INC

PENNSYLVANIA ELECTRIC CO

PEOPLES BANK CREDIT CARD MASTER TRU

ST

PERFORMANCE FOOD GROUP CO

PHILLIPS PETROLEUM CO

PHON NET CON INC

POLYPHENOLICS INC

PRIDE INTERNATIONAL INC

PROVIDIJAN MASTER TRUST

PROVIDIAN NATIONAL BANK /NEW/

R-TEC HOLDING INC

RAINING DATA CORP

RALCORP HOLDINGS INC /MO

RANCON REALTY FUND

BAVENSWOOD WINERY INC

09/19/01

09/17/01

09/04/01 AMEND

09/27/01

09/28/01

09/24/01

09/24/01

03/07/01

09/25/01

09/26/01

08/29/01 AMEND

09/28/01

09/28/01

09/25/01

09/24/01

09/28/01

09/27/01

09/28/01

09/26/01

09/28/01

09/25/01

09/25/01

09/17/01

09/11/01

09/11/01

09/28/01

09/28/01

09/28/01

08/21/01

09/25/01

09/28/01

09/28/01

09/28/01

09/28/01

09/25/01

09/26/01

09/26/01

08/31/01

09/10/01 AMEND

09/14/01

09/27/01

09/25/01

09/13/01

09/17/01

09/17/01

07/17/01 AMEND

09/27/01

09/27/01

08/31/01

09/25/01

DE

DE

CA

MADE

DE

DE

MO

DE

NJ

DE

DE

DE

DE

NV

DE

CA

DE

PA

DE

IL

DE

DE

DE

DE

DE

FL

UT

DE

DE

TX

DE

OR

OR

PR

PA

CT

TN

DE

NY

DE

IA

DE

MO

CA

CA


NdE OF ISSUER

STATE

CODE

8K ITEM NO123456789 DATE COMMENT

PAVISENT TECHNOLOGIES INC

REII INC

RELIANT ENERGY INC

RELIANT RESOURCES INC

ROBERTS TRADING CORP

ROYAL PRECISION INC

SAGE INC/CA

SAKS INC

SENTRY BUILDERS CORP

SONO TEK CORP

SOUTHWEST GAS CORP

STANDARD AUTOMOTIVE CORP

STEVENS POINT BEVERAGE CO

STRUCTURED ASSET SEC CORP MORT PASS

THR CERTS SER 2001 3A

STRUCTURED ASSET SECURITIES CORP

STRUCTURED ASSET SECURITIES CORP

SYNAPTIC PHARMACEUTICAL CORP

TELEMONDE INC

TIDEL TECHNOLOGIES INC

TITAN CORP

TOWER AUTOMOTIVE INC

TOYOTA AUTO FINANCE RECEIVABLES LLC

TOYOTA AUTO LEASE TRUST 1998

TOYOTA AUTO LEASE TRUST 1998-B

TRANSOCEAN SEDCO FOREX INC

TREMONT ADVISERS INC

TYSON FOODS INC

AGGREGATES INC

ULTRATECH STEPPER INC

UNITED ONLINE INC

UNITED SURGICAL PARTNERS INTERNATIO

NAL INC

UNIVERSAL CORP /VA/

VARI CO INC

VERTEX PHARMACEUTICALS INC MAVSOURCE INC

WEST ESSEX BANCORP INC

XCEL ENERGY INC

DIMENSIONAL PHARMACEUTICALS INC

09/27/01

09/30/01

09/27/01

09/27/01

09/25/01

10/01/01

09/27/01

09/21/01

06/30/01 AMEND

02/28/01 AMEND

09/24/01

09/28/01

09/25/01

09/25/01

09/26/01

09/26/01

09/26/01

09/26/01

09/24/01

08/04/01 AMEND

09/28/01

09/17/01

09/25/01

09/25/01

09/28/01

09/27/01

09/25/01

09/28/01

09/28/01

09/25/01

09/28/01

09/28/01

09/27/01

07/18/01 AMEND

09/26/01

09/28/01

09/28/01

09/24/01

DE

DE

TX

DE

NY

DE

DE

TN

DE

NY

CA

DE

WI

DE

DE

DE

DE

DE

DE

DE

DE

DE

CA

CA

E9

DE

DE

DE

DE

DE

DE

VACO

MADE

MN

DE


Documents

SEC News Digest, October 1, 2001 · What Glasser Legal Works/Chicago-Kent Financial Services Convergence Where New York Marriott Eastside New York Contact Steve Seemer 973 890-0008